Volkswagen executive pleads guilty in U.S. emissions cheating case

DETROIT (Reuters) - Volkswagen AG (VOWG_p.DE) executive Oliver Schmidt pleaded guilty on Friday in U.S. District Court in Detroit in connection with a massive diesel emissions scandal that has cost the German automaker as much as $25 billion.

Under a plea agreement, Schmidt will face up to seven years in prison and a fine of between $40,000 and $400,000 after admitting to conspiring to mislead U.S regulators and violating clean air laws.

Schmidt will be sentenced on Dec. 6.

In March, Volkswagen pleaded guilty to three felony counts under a plea agreement to resolve U.S. charges that it installed secret software in vehicles in order to elude emissions tests.

U.S. prosecutors have charged eight current and former Volkswagen executives so far.

“Schmidt participated in a fraudulent VW scam that prioritized corporate sales at the expense of the honesty of emissions tests and trust of the American purchasers,” said Deputy Assistant Attorney General Jean Williams.

“Schmidt, along with each and every official involved in this emissions scandal, will be held fully accountable for their actions by the Department of Justice as this investigation continues.”

Earlier this year, Schmidt was charged with 11 felony counts and federal prosecutors said he could have faced a maximum of up to 169 years in prison. As part of his guilty plea, prosecutors agreed to drop most of the counts and Schmidt consented to be deported at the end of his prison sentence.

Schmidt was in charge of the company’s environmental and engineering office in Auburn Hills until February 2015, where he oversaw emissions issues.

‘CHEATING’

After being informed of the existence of the emissions software in the summer of 2015, according to the agreement, Schmidt conspired with other executives to avoid disclosing “intentional cheating” by the automaker in a bid to seek regulatory approval for its model 2016 VW 2 liter diesel vehicles.

During the period in question, Schmidt was working at the company’s Wolfsburg, Germany, headquarters as “one of three subordinates” to the head of engine development. He was arrested when he traveled to the United States in early January.

Volkswagen said on Friday it “continues to cooperate with investigations by the Department of Justice into the conduct of individuals. It would not be appropriate to comment on any ongoing investigations or to discuss personnel matters.”

As part of the agreement, Volkswagen agreed to spend as much as $25 billion in the United States to resolve claims from owners and regulators over polluting diesel vehicles and offered to buy back about 500,000 vehicles.

James Liang, a VW employee who pleaded guilty to misleading regulators, is cooperating with prosecutors and will be sentenced on Aug. 25.

Among those indicted earlier were Heinz-Jakob Neusser, former head of development for VW Brand and two former heads of engine development, Jens Hadler and Richard Dorenkamp.

Most of the Volkswagen executives charged are in Germany and may not travel to the United States since Germany typically does not extradite its citizens.

Last month, the Justice Department charged former Audi AG NSUG.AG manager Giovanni Pamio with directing employees to design software enabling thousands of Audi diesel cars to beat U.S. emissions tests. He was arrested in Germany. Audi is a unit of VW.

Reporting by Nick Carey in Detroit and David Shepardson in Washington; Editing by Jeffrey Benkoe and Bernadette Baum